Car Insurance Facts for New Drivers

For first time drivers, knowing where to start with insurance can be a tricky game. If you’re trying to figure it out for yourself, here are a few things to keep in mind as you navigate the wild world of automotive insurance with your first vehicle.

Know What’s Required

In every state, there are different requirements for what you need in order to get automotive insurance. Furthermore, you need to be familiar with the minimum amount of coverage your state requires in order for you to legally drive. Many states require liability insurance, while the rest is optional, while many other states also require personal injury protection and uninsured motorist coverage. To find out what the requirements are in your state, head to the DMV’s website.

What Does Coverage Mean?

It’s important to learn the lingo when you’re determining what insurance might be best for you. Whether you’re 16 and getting on the road as soon as you’re legally able, or you’ve been living that car-less life for a while, and are only just now getting your license and starting to drive, there’s a lot to understand in order to make sure you can get what you really need to keep your pocketbook safe in the event of injury or collision.

Coverage is just that – what’s covered by your insurance, after you hit your deductible, in the event of the incident that your coverage details. There are a number of different types of coverage. There’s collision coverage, personal injury, liability, uninsured motorist, and comprehensive coverages. What’s covered under each will vary slightly from insurance provider to insurance provider, so make sure to ask questions. Understanding the coverage you’re choosing for your automobile will save a lot of headaches if a collision occurs.

What Determines Your Rate?

What determines your rate is also variable state by state, and some states weigh certain variables more heavily than others. As a baseline, the things that are almost always considered when figuring out your rate are: length of time driving (sorry!), driving record (if you’ve crashed before, or have several citations on your record, your rates will likely be higher), age, and coverage levels (if you have less coverage, or higher deductibles, you are likely to have lower rates, but are open to greater out-of-pocket expenses in the event of a collision). Don’t be afraid to ask what’s being considered when you source quotes from insurance companies. It’s also a good idea to ask what kinds of discounts they offer – some offer discounts for good grades, or for things like being a member of a credit union. You never know until you ask!

Understand Bundling

Sometimes, there are savings to be had if you are in need of different types of insurance and decide to use a single provider for all of them. Ask your insurance provider (or several providers if you’re in quote-gathering mode) what discounts they offer for bundling. The most common bundles often include things like automotive and homeowners, or automotive and renter’s insurance. Look at your situation and determine if bundling might be a good option for you – and if it is, make sure to know what kind of discount you’re dealing with so you can decide if it’s really worth your while.

There’s Always More to Learn

Look, we’re not going to lie. Automotive insurance is complex. These basics will help you get started and feel comfortable having conversations with insurance providers, as well as enable you to be an advocate for yourself with a foundation of knowledge. However, if you find the topic fascinating, there is always more to learn. The DMV website is a great place to dive deeper and start to become your own personal automotive insurance expert, if that’s your thing. And if it’s not, simply making sure you have the right coverage for your peace of mind is really all you need to do.